Despite facing growing difficulties, Czech companies help Ukraine
The first weeks of the war in Ukraine have caused growing negative impact on the economic situation of Czech companies. Nevertheless, most of them are helping financially, providing accommodation or products and services, and they are ready to offer jobs to Ukrainian refugees. More than four-fifths of the surveyed companies are actively involved in helping Ukraine as documented by a flash survey of the Confederation of Industry of the Czech Republic, which was conducted on 11 - 15 March, involving 124 industrial enterprises. The survey also confirmed that the jump in energy and raw materials prices is having the biggest impact on companies. However, some companies plan to address the rising costs in the long term and systematically by investing in energy savings or technological and digital transformation.
The war in Ukraine is having a negative impact on most companies. 86% of companies reported this. However, the survey showed that the indirect effects of the war are more significant than the direct effects on the trade with Russia, Belarus or Ukraine. Most of all, companies feel constrained by the jump in energy and raw material prices. More than half of the respondents reported a major impact on their business, and 15% of the companies even suffer fatal effects.
Companies are also hesitant due to their fears of shortages and restrictions on the supply of certain inputs or fuel prices. "We are fully aware that we all have to bear some losses due to the war. But after two years of the pandemic, this is another blow to businesses. The government must be prepared to intervene where there is a risk of irreversible impact on whole sectors. The price of energy and fuel is leapfrogging and sudden. What would help, for example, is the promised package of concrete measures including, among other things, compensation for indirect costs for the most energy-intensive sectors and adjustments to the renewable energy fees. Thus, companies could concentrate on actively helping to deal with the effects of the war in Ukraine without having to increase prices or reduce their operations," notes Jaroslav Hanák, President of the Confederation of Industry of the Czech Republic.
COMPANIES WANT TO ADDRESS THE ECONOMIC SITUATION PROACTIVELY AND SYSTEMATICALLY
Almost two-thirds of companies are still assessing the specific impact the conflict has or will have on their business. However, a significant number of companies are aware that the situation needs to be addressed in the long-term and systematically. More than a third of the responding companies therefore want to invest in energy savings, one quarter in renewable energy sources and less than one fifth plan to increase labour productivity by using elements of digitisation or Industry 4.0.
Almost half of the companies surveyed would prefer the state to support long-term pro-growth measures such as investment in research and development or opening new export markets instead of short-term compensation measures. As a priority, companies would like the state to have already implemented some concrete measures to prevent energy and fuel price increases.
The survey also showed that some companies already have to resort to operational solutions. "It is clear that prices will continue to grow and inflation will increase, so companies are looking for additional savings. Almost half of the companies are planning to reduce operating costs and increase the prices of their products and services. Unfortunately, one quarter of the companies have to cut their budgets for planned investments, which is definitely not good news," says Bohuslav Čížek, Director of the Economic Policy Section and Chief Economist of the Confederation of Industry of the Czech Republic.
COMPANIES WANT TO HELP WAR REFUGEES
More than four-fifths of the companies are actively involved in helping the war-affected Ukraine, especially financially and with material deliveries. More than one quarter of companies have helped refugees or the families of their Ukrainian employees with accommodation. Other companies offered their products or services. "Despite the fact that some companies are facing a new situation and have to struggle with a shortage of people or rising energy or raw material prices, the wave of solidarity and help is enormous. I appreciate it and I thank all the companies for what they do," says Jaroslav Hanák, President of the Confederation of Industry of the Czech Republic.
Almost three-quarters of the companies surveyed said they are ready to employ refugees from Ukraine. 124 companies that took part in the survey already report almost 1,500 vacancies that they can offer to refugees. Companies are mostly looking for skilled work force and are ready to offer long-term cooperation. Since the beginning of the war, some companies have already managed to employ some Ukrainian refugees.
"So far, employers have been struggling with administrative hurdles, such as dealing with visas and other documents. However, this should change with the approval of Lex Ukraine, which will make employing refugees faster and easier. We must appreciate the speed with which the state has adjusted visa and other obligations to make everything work, although we understand that the capacity of ministerial staff is now limited due to the influx of refugees," says Jaroslav Hanák, president of the Confederation of Industry.
More than half of the surveyed companies would welcome faster procedures for employing Ukrainian refugees at this time. Companies also count on helping refugees to overcome the language barrier at work and thus will play an important role in their adaptation and integration. For example, almost two-thirds of companies plan to provide as much information as possible in both Czech and Ukrainian in the workplace, and one-third of companies plan to offer Czech language courses or interpreters.
More than half of the companies involved in the survey of the Confederation of Industry currently employ Ukrainian workers. However, their return to their home country is not yet a significant problem for companies. Almost two thirds of the companies affected by the departure of Ukrainians are able to cope with the situation.
ABOUT THE SURVEY
The survey of the Confederation of Industry of the Czech Republic took place on 11 - 15 March 2022 and involved 124 industrial enterprises from the Confederation's membership base from all regions and sectors. 12% were small companies with up to 50 employees, 41% were medium-sized companies with 51 to 250 employees and 48% were large companies with more than 250 employees.